Update: Student Loan Debt Relief is currently blocked
Article from studentaid.gov
“Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you’ve already applied, we’ll hold your application. Subscribe and check back here for updates. We will post information as soon as further updates are available.
The student loan payment pause is extended until the U.S. Department of Education is permitted to implement the debt relief program or the litigation is resolved. Payments will restart 60 days later. If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 – payments will resume 60 days after that. We will notify borrowers before payments restart.” Click here for more information about the Student Loan Debt Relief plan.
Here’s what you need to know about this debt relief program
Recently, the Biden-Harris Administration passed a three-part Student Loan Debt Relief Plan. This plan includes:
- An extension of the repayment pause to December 31, 2022
- Forgiving $10,000 of student loan debt for qualified families
- Taking new measures to make “the student loan system more manageable for current and future borrowers” (Source).
In order to qualify for debt relief, the annual individual income will need to be less than $125,000 or a household income of less than $250,000. For those who received a Pell Grant in college and meet the income threshold, they may be relieved of up to $20,000 in debt. Those who did not receive a Pell Grant but also meet the threshold are eligible for up to $10,000 in debt relief. Additionally, through the Public Service Loan Forgiveness program (PSLF), certain borrowers (those employed by non-profits, military, or federal, state, Tribal, or local governments) could potentially have their student loans forgiven. In order to apply to PSLF, you will need to register via studentaid.gov before the October 31, 2022 deadline.
What student loans are eligible for forgiveness?
Most federal student loans will be included in this debt relief (Source). These include but are not limited to:
- Undergraduate and Graduate Direct Loans
- Parent PLUS and Grad PLUS Loans
- Consolidation loans
- Federal Family Education Loan Program Loans held by ED
- Federal Perkins Loan Program held by ED
- Defaulted Loans
Here are the dates you need to know:
- When to expect the application online- October 2022
- Date encouraged to apply for debt relief by- November 15, 2022
- End of repayment pause- December 31, 2022
- Overall deadline for debt relief application- December 31, 2023
The full amount of relief will be determined within 4-6 weeks and will be determined by your outstanding balance and whether you received a Pell Grant. If your outstanding balance is less than what you are eligible for, you will receive only the full balance of what you owe. To sign up for text alerts or learn more about the upcoming student loan forgiveness, please visit www.studentaid.gov.
How to Apply:
The application for Student Loan Debt Relief has officially been launched! We encourage all interested people with debt to fill out this quick application (click here), as you’ll be one of the first to be reviewed. Once you have submitted your application, you will receive a confirmation email, though your status won’t show up in your StudentAid.gov account. After that, you won’t need to apply again, and StudentAid.gov will notify you if you’ve been approved! For more information on the application process, click here.
*Please note that the application deadline is still December 31, 2023.
Click here to apply for Student Loan Debt Relief.
Blog by Kim Storen, EA – Business Tax Manager
Learn more about Kim and the rest of the Storen Financial team here.